Four tips to help you achieve a comfortable retirement

Planning for your retirement can be a bit of a minefield. So what should you do to get started to ensure that your retirement savings are on track, especially if you’re going to buy an annuity? Read on to find out…

Retirement tip #1: Start early!

Starting early is a crucial factor in retirement planning. The earlier you start, the less you’ll have to contribute on a monthly basis to your savings. And the easier it will be to achieve your saving goals, Tim Bennett in Money Week explains.

You want to allow as much time as possible for compounding to work its magic. The longer your money has to grow, the greater the snowball effect on it growing.

Retirement tip #2: Keep an eye on your pension savings

You need to ensure you check the performance of your pension fund on a periodic basis, such as once a year. Your provider should send you out this information.

If your provider is providing very optimistic future growth rates, be wary to rely on them. You should take any projected growth rates above 5% with a pinch of salt.

Retirement tip #3: Shop around when looking for an annuity

You need to make sure you take your time looking for the right annuity for you. To want to ensure that it suits your needs and more importantly your expectations.

But with people living longer, the income from annuities can be much less than you might expect. And if you want the income adjusted for inflation, for instance, you can expect your income to be even lower.

Retirement tip #4: Diversify

It’s a good idea to have your retirement funds spread across a number of different products. For example, have some money in your pension fund, an annuity and some money invested in income paying shares.

This can lower your risk.

So there you have it, four tips to help you achieve a more comfortable retirement.